COVERAGE NOTE: Clarification of methodology for NA RCP

While the regular publication date for North American recovered paper prices is the 5^th of the month, there are certain exceptions:

• Prices are published on the 6^th or 7^th when there are less than 2 business days before the 5^th of the month due to the national US holidays.

For example, in January 2016, the first business day is the 4^th; in July 2016- the only business day before the 5^th is Friday, July1^st, because of the Independence Day celebrated on July 4^th.  

Having only one business day to conduct a price survey and evaluate all collected information is not sufficient to produce a price index that would be representative of the market. Therefore, the deadline is extended.

• Prices are published on the 4^th of 6^th when the 5^th of the month falls on a weekend in a week without holidays.

When the 5^th falls on Saturday, prices are published a day earlier- on Friday, the 4^th; when the 5^th falls on Sunday, prices are published on a following day – Monday, the 6^th. For example, in 2016 because of this reason, prices will be published on the 4^th in March and November, and on the 6^th in June.

In 2016 Recovered Paper Price Watch will be published on the following dates: January 6, February 5, March 4, April 5, May 5, June 6, July 7, August 5, September 6, October 5, November 4, December 5.

Assessments are also published on Friday in PPI Pulp & Paper Week, following the issue of Recovered Paper Price Watch.

Time assessment window

North American recovered paper prices are based on the assessment of orders taken in the month to date for shipment in the current month (aka primary assessment window). However, in certain cases, older data representing orders taken from the 20^th to the end of the month is also included:

• A data provider has no qualifying transactions in the primary window.
• Other data suggest that dramatic market pricing changes have occurred leading up to the primary assessment window.

In other words, if company A reports a price change that occurred shortly before the primary price survey period, the price levels reported will be interpreted in one of the following ways (all other things being equal):

Even though a price change was experienced by company A for just a week, and didn’t make or necessarily move the market regionally or nationally, it could still impact the final price assessment, if the change involved a large enough amount of volume in a region and if the change was determined to be sustained for a period of time (meaning company A’s counterparties accepted the price change).

It’s important to note that these older prices are only considered in the assessment if they show movement that can be corroborated by data from other data providers from the primary assessment window.

Full methodology document on NA RCP prices is available here: http://www.risiinfo.com/Marketing/NMP/indices_methodology/RISI_price_method_NA_RCP_2-2016.pdf